Amazon (amzn – (Free Report) is scheduled to report the results of the first quarter 2025 on May 1st.
In the first quarter, net sales are expected to be between $151 billion and $155.5 billion. Net sales are expected to increase by 5-9% from reported figures for the same period last year. Management projects the unfavorable forex impact of 150 basis points.
Zacks Consensus’s net sales estimate is fixed at $1545.6 billion, indicating growth of 7.85% from reported quarterly quarter.
The Zacks consensus estimate of first-quarter revenues is fixed at $1.35 per share, indicating growth of 19.47% from the same period last year.
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The company benefits from its dominant position in e-commerce and in the cloud market. It also plays a role in enhancing the generation AI function.
A surprising history of AMZN revenue
Amazon has an astonishing history of impressive revenue. In the final reporting quarter, the company brought a revenue surprise of 22.37%. The company won revenues in each of the four quarters, which exceeded the Zacks Consensus estimates. The average surprise is 25.27%.
AMZN revenue whispers
The proven model doesn’t predict Amazon’s revenue beat this time. A combination of positive revenue ESP and Zacks Rank #1 (strong buy), 2 (purchase), or 3 (hold) increases the odds of revenue beats. You can reveal the best stocks to buy or sell before they are reported in the Revenue ESP filter.
AMZN currently has a current revenue ESP of -2.57% and Zacks rank #3. You can see the full list of Zacks #1 rank stocks today here.
Factors that will shape future results for AMZN
As Amazon prepares to report revenue for the first quarter of 2025, investors are faced with a complex outlook that guarantees a cautious approach. Despite its continued strength across multiple segments, several factors suggest that they are holding inventory or waiting for a better entry point.
Amazon Management has flagged two important headwinds for the first quarter of 2025. The unfavorable foreign exchange impact and the lack of profits in LEAP years. The company particularly noted that the first quarter, 2024, benefited from around $1.5 billion in additional net sales from the extra jump day, resulting in a challenging comparison over the previous year. Additionally, management is forecasting an unusually large forex headwind of approximately $2.1 billion (150 basis points) in the first quarter.
AWS and AI Initiatives
Crown Jewel, Amazon’s portfolio, continues to shine, with Zacks’ consensus estimates AWS sales of 17.1% year-on-year growth with a forecast of $293.1 billion. In the quarter, Amazon Ads brought generative AI capabilities to Amazon Marketing Cloud with a new SQL generator, allowing advertisers to develop insights faster using natural language. Additionally, with the launch of WIM, a Mexican cloud-native mobile network operator, AWS has achieved a remarkable victory that is fully built on AWS infrastructure, demonstrating the versatility of a platform beyond traditional enterprise applications.
Please note that strengthening our customer base likely achieved topline growth for AWS in the first quarter. It is also expected that Amazon will help maintain cloud control over such powerful candidates Microsoft (msft – Free report), alphabet (googl – (Free Report) and Oracle (orcl – (Free report).
Entertainment expansion
The streaming segment continues to gain momentum through expanded products. Prime Video began coverage of its first NASCAR season in practice and qualifying rounds in February, with Premium Network MGM+ releasing trailers for the upcoming mystery series Nine bodies in a mexican morgue Produced by Sony Pictures Television. These content initiatives should support a consensus estimate of subscription services sales to $11.5 billion, indicating a growth of 6.8% compared to the previous year.
E-commerce and physical retail
Amazon’s physical retail operations are expected to show healthy growth, with consensus estimates of physical stores forecasting revenue of $5.42 billion, a 4.2% increase from the previous year. Integrating technologies such as Amazon Dash Cart into brick-and-mortar stores will enhance the company’s omnichannel presence.
Third-party seller services are key growth drivers with a consensus estimate of $36.61 billion, showing an increase of 5.8% year-on-year. This reflects the continued success in monetizing Amazon’s market platform and fulfillment services.
AMZN Price Performance and Stock valuation
Amazon’s stock lost 13.9% in the previous year, compared to a broader Zacks retail homogeneity sector and a 3.7% and 6.4% decline in the S&P 500 index, respectively.
AMZN grade performance
Image Source: Zacks Investment Research
So let’s take a look at the value Amazon offers investors at its current level. AMZN trades at premium at 2.81x forward 12 months P/s compared to Zacks Internet-Commerce Industry 2.09x, reflecting its elasticity rating.
AMZN’s P/S F12M ratio shows an increased rating
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Investment paper
Amazon presents mixed investment cases ahead of its first quarter 2025 revenues, ensuring pending recommendations. The company continues to show strength across multiple segments, with AWS increasing 17.1% year-on-year to $293.1 billion, demonstrating strategic initiatives such as AI integration, NASCAR streaming rights and expanding entertainment content. Amazon’s long-term growth trajectory remains the same, but beware of investors about recent challenges. The company’s first quarter guidance project will operate incomes between $14 billion and $18 billion compared to $15.3 billion in the first quarter of 2024, suggesting potential pressure on margins. Coupled with forex headwinds and tough comparisons over the previous year, next year’s quarter may not bring about the accelerated growth investors expect. While existing shareholders will need to maintain their position, future investors may find more attractive entry points after earnings.
Conclusion
Amazon continues to innovate in multiple ways, from AI-powered advertising tools to expand streaming content and growing cloud infrastructure. The expected foreign exchange headwind $2.1 billion, lack of benefits for the jump year, and potential operating profits that are potentially below annual AGO levels suggest a difficult quarter ahead. AWS is a strong growth driver with forecasting a 17.1% increase from the previous year, with third-party seller services continuing their upward trajectory, but these temporary headwinds guarantee a pending recommendation for existing shareholders, suggesting that potential investors are waiting for post-revenue clarity before establishing new positions.
